[Football] The Derby Way, 2017-18 edition

[Weststander]

For me - Fulham > Derby > Villa > Boro

Agree with that. Boro a clear bottom, following their lack of any class.

 

[Weststander]

I have noticed the odd Palace related dig Fair play. I suppose all the time the fine for late accounts is peanuts clubs/people will take advantage. I reckon our wage bill will be up and around £85m this season. Thanks for creating this content in simple terms for non accountants like me to read and understand.

Your payroll cost fir 2015/16 was £80.5m. That was under the old broadcasting income deal (which inevitably falls the way of players), and you've since acquired players who'd demand top money Sakho, Townsend, Van Aanholt, Schlupp and Benteke. I reckon CPFC's payroll costs for 2017/18 will be £95m to £100m.

It's the way of the PL.

 

[Weststander]

Fair enough - which accounting rules say you can't do it?
Don't businesses have some leeway in how they depreciate their assets?

I understand the second part, I just didn't know that it wasn't ok to reflect as asset like that, because it can be a true fair reflection of the value of an asset - if you buy a player for £5m, and with 1 year left on the contract you sell them for £5m, you didn't really need to write their purchase price off as a cost, do you. But if that's against the rules, fair enough, I didn't know.

If, as above, it's against company law, then fair enough, they can't do it, it's cheating. However, if companies are allowed to amortise assets in that way, the fact that it helps comply with FFP isn't on it's own an issue.

So given that they've broken the law (according to posts above) will they get pulled up on it?

Good questions. To clarify, without boring you with chapter and verse.

Firstly, remember we’re dealing with large and medium sized companies, so they really must abide by company law and accounting standards. There’s no leeway for pretending an asset is going to last longer than the truth, which a small owner managed entity might do with say vehicles or plant.

Costs in acquiring player registrations (transfer and directly related agents fees) are treated as intangible fixed assets. That cost must be written down in a straight line to nil over the term of the contract. No ifs and buts.

Any later valuation years ahead is irrelevant and would be at best guess work. This cannot be brought into consideration.

Should a player be sold before the contract is up, the proceeds are credited to the P&L Account as ‘Profit//Loss on disposal of intangible assets’, against which the remaining net book value in the balance sheet for that player’s registration costs are offset.

 

[Triggaaar]

Yeah Trig, stop being so lazy. [emoji16]

I'm sad and according the the number of posts I seem to have made on NSC, I have no life. But I'm not sad enough to read that article.

 

[brakespear]

If you hate Boro more than Villa, why do you want them to turn them over and make the final ?

Fulham are decent and certainly better than Boro, but flaky. I definitely don't want Boro having the chance of fluking their way up to the PL in a one-off at Wembley. I'd be mightily pissed off if that happened.

Nope, I stick to my original post. I hope Villa finish the job and dry hump them tonight. Then I won't mind too much who goes up.

Which is worse, losing in the semi-final or losing in the final?

 

[Weststander]

Which is worse, losing in the semi-final or losing in the final?

Footballers have always said losing in the semis is worst. A complete anti climax and missing the occasion.

 

[Triggaaar]

It's in the article.

Ok, it turns out my life is not interesting enough to keep me from the article after all.

In the article it says the residual value doesn't have to be zero if there is an active market for the asset and it is probable that the market will exist at the end of the assets useful life. You could certainly argue that you can sell players and so they have residual value. The article then defines 'active market' which requires the assets to be homogeneous. Where is this 'active market' definition taken from?

https://www.diva-portal.org/smash/get/diva2:721716/FULLTEXT01.pdf

The residual value of an intangible asset with finite useful life is assumed to be zero unless:
(IASB, 2012)
1. A commitment, by a third party, of purchasing the asset after its useful life
exist; or
2. An active market exists and residual value can be determined and the market
will still exist after the useful life of the asset.

Active Market:
Even though an active market exist, it is impossible to know the actual value of the
player as it involves too many features, such as: reputation, form, age, abilities and the
financial status of the selling/buying club. However, with today’s technology, including
statistical data of almost everything a player does on the pitch (such as: passing stats,
goals and areas covered) we think it might be possible to use it to create some kind of
valuation mode

 

[Lady Whistledown]

Forest's chairman / major investor before Fawaz died on a running machine.

Now here's an example of a sentence which could do with some punctuation. I found myself wondering how I'd not heard about the death of Fawaz.

 

[Triggaaar]

If someone has written to the Financial Reporting Council they might

I hope that's not a tease.

 

[Lady Whistledown]

Surprised how many Derby fans appeared to be in tears last night. They were easily the worst team in the play offs, certainly nowhere near the standard of Villa, much less Fulham, so they can't have gone into it with huge expectations. I'm not into sobbing at football matches myself and find it a bit cringeworthy watching other grown adults do it, but last night really did take the biscuit. If a team finished like we did two seasons ago, with a heroic last ditch failure to reach the top two, a chronic injury crisis in the first leg of the semi final, and then a stirring but ultimately futile performance (and a shit refereeing decision) in the second leg, then I could understand it more. Not in Derby's situation though.

As for the final, hopefully it will be Fulham against Villa, as Boro is a disgusting place for an away trip. Then I'd be grateful if Fulham could turn Villa over at Wembley, as there were plenty in the Holte End who took rather too much pleasure (for my liking) in their spawny last ditch equaliser in our 2017 promotion season. Screw you all, and I'll make an exception to my rule of not wanting to see football fans sobbing just for you

 

[Triggaaar]

Surprised how many Derby fans appeared to be in tears last night. They were easily the worst team in the play offs, certainly nowhere near the standard of Villa, much less Fulham, so they can't have gone into it with huge expectations. I'm not into sobbing at football matches myself and find it a bit cringeworthy watching other grown adults do it

You must have been a joy when Mr Krab was sulking.

 

[Yes Chef]

Surprised how many Derby fans appeared to be in tears last night. They were easily the worst team in the play offs, certainly nowhere near the standard of Villa, much less Fulham, so they can't have gone into it with huge expectations. I'm not into sobbing at football matches myself and find it a bit cringeworthy watching other grown adults do it, but last night really did take the biscuit. If a team finished like we did two seasons ago, with a heroic last ditch failure to reach the top two, a chronic injury crisis in the first leg of the semi final, and then a stirring but ultimately futile performance (and a shit refereeing decision) in the second leg, then I could understand it more. Not in Derby's situation though.

As for the final, hopefully it will be Fulham against Villa, as Boro is a disgusting place for an away trip. Then I'd be grateful if Fulham could turn Villa over at Wembley, as there were plenty in the Holte End who took rather too much pleasure (for my liking) in their spawny last ditch equaliser in our 2017 promotion season. Screw you all, and I'll make an exception to my rule of not wanting to see football fans sobbing just for you

Yep, I was in the Villa end that day and they celebrated with such glee at our ballsing up the title that my previous indifference towards them turned into instant dislike.
They didn't even care that they handed Newcastle the title, a team they have a strange rivalry with

 

[Weststander]

Ok, it turns out my life is not interesting enough to keep me from the article after all.

In the article it says the residual value doesn't have to be zero if there is an active market for the asset and it is probable that the market will exist at the end of the assets useful life. You could certainly argue that you can sell players and so they have residual value. The article then defines 'active market' which requires the assets to be homogeneous. Where is this 'active market' definition taken from?

https://www.diva-portal.org/smash/get/diva2:721716/FULLTEXT01.pdf

We're mixing up player residual values mid contract and at the end of a contract.

Necessarily a player's registration cost (intangible fixed asset) must have a nil value when the contract's up. They walk away on a Bosman. There cannot be a residual value then.

You've mentioned optional Fair Value Accounting, and the key point above applies to that too. In Fair Value Accounting (which Derby adopted), in the rare case of an active market (taxi licences are often mentioned), the entity revalues annually to fair (open market) value, across the entire category of assets. Mid contract, that only effects balance sheets, with the paper gains and losses of such revaluations not featuring in the P&L. Instead they simply inflate the balance sheet value, with a corresponding increase in a Revaluation Reserve.

The only effect on the P&L is actually to increase costs, as the amortisation charge for each period increases, based on higher player values.

 

[Your Mum]

Ok, it turns out my life is not interesting enough to keep me from

your Mum

 

[El Presidente]

Your payroll cost fir 2015/16 was £80.5m. That was under the old broadcasting income deal (which inevitably falls the way of players), and you've since acquired players who'd demand top money Sakho, Townsend, Van Aanholt, Schlupp and Benteke. I reckon CPFC's payroll costs for 2017/18 will be £95m to £100m.

It's the way of the PL.

View attachment 96932

*Dullard Klaxon Alert Approaching*

Wage bill can only increase by £7m plus any extra money generated by the club itself, ie excluding broadcasting income increases.

 

[Weststander]

*Dullard Klaxon Alert �� Approaching*

Wage bill can only increase by £7m plus any extra money generated by the club itself, ie excluding broadcasting income increases.

Does the generated by itself include sponsorship / commercial, allowing scope for ‘overly generous’ receipts of that ilk?

We’ll have to wait years to find out! But what your guess be on CP’s 2017/18 total payroll costs?

 

[El Presidente]

Does the generated by itself include sponsorship / commercial, allowing scope for ‘overly generous’ receipts of that ilk?

We’ll have to wait years to find out! But what your guess be on CP’s 2017/18 total payroll costs?

It gets complicated of course (allowing lawyers, accountants and other parasites to feather their nests further). If you look at Everton, their training ground is now sponsored by USM Holdings and is worth £4-5m a year.

USM Holdings is owned by Alisher Usmanov, who is the second largest shareholder in Arsenal, and who paid about £200 million for his last share purchase in Arsenal when buying shares from Farhad Moshiri, who used the proceeds to buy...Everton. The USM deal was given a from the Premier League, but what commercial benefit is there to an Uzbekistan mining company sponsoring a training ground on Merseyside?

Wages rises for other clubs have been quite modest, so I think Palace will be about £90m

 

[Lady Whistledown]

Boro hit the bar and their fans are in despair The only thing that would be funnier is if Mike Dean makes a real shocker of a decision- say to disallow them an equaliser in the 95th minute.

 

[McTavish]

Ok, it turns out my life is not interesting enough to keep me from the article after all.

In the article it says the residual value doesn't have to be zero if there is an active market for the asset and it is probable that the market will exist at the end of the assets useful life. You could certainly argue that you can sell players and so they have residual value. The article then defines 'active market' which requires the assets to be homogeneous. Where is this 'active market' definition taken from?

https://www.diva-portal.org/smash/get/diva2:721716/FULLTEXT01.pdf

You need to read the whole article. There is a definition of an 'active market' and it is very hard to argue that it could include footballers.

 

[Weststander]

You need to read the whole article. There is a definition of an 'active market' and it is very hard to argue that it could include footballers.

Looking at Derby’s accounts they’ve done it! But it doesn’t reduce a loss, in fact, it causes greater annual amortisaton costs.